What investment advice would you give to someone who is young and only recently started gaining a stable income?

29 July 2021

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Question by Josh

What investment advice would you give to someone who is young and only recently started gaining a stable income?


Answered by Andrea Painter

Hello Josh

Well done for now having a stable income, congratulations.

First things first, it is a good idea to save a cash reserve/emergency fund. This is for the unexpected, ideally around 3 months salary and this should be kept in cash based savings, so that it is readily available.

Then, you can start to think about savings for the future. You may want to start with savings for a holiday and then start thinking about savings for a home. You can look at the Lifetime ISA (Individual Savings Account) which offers some good opportunities. This can be used to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA.

You can put in up to £4,000 each year, until you’re 50. You must make your first payment into your ISA before you’re 40. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

Ideally, when looking at longer term savings, generally this would be a with a view of 5 years plus, and you could then explore stockmarket based savings, which can go up as well as down. This is where I can help in terms of putting together an investment strategy.

You may then want to look at pensions, your employer may have a work based scheme, which you should explore first, in conjunction with this, you could look at additional savings and a private pension.

I do hope this helps in terms of giving you some ideas and a starting point.

Andrea

Answered by

Andrea Painter

Financial Planning Consultant

Andrea is a mother of two teenage daughters with a demanding, but fulfilling career in Financial Advice. She loves helping clients to achieve their objectives and a strength of mine is helping clients to retire and bringing all areas of their finances together to enable them to have a fulfilling retirement without money worries.